The pandemic continues to have a ripple effect on the economy, with Wall Street bonuses taking a big hit last year. Bankers earned an average bonus of just $176,000, marking the steepest decline since the 2008 financial crisis. WallStreet
The decreased bonuses didn’t come as a surprise, given the past couple of years banks have had. In 2021, thanks to companies striking deals and going public, firms brought in more money. But last year, with fewer deal-advising fees, stock offerings, and bond sales, companies experienced a $50 billion drop in revenue, according to data cited by the. That was reflected in a smaller overall bonus pool—$33.7 billion compared with $42.7 billion in 2021.
As a result of those lessened profits, banks have been laying off thousands of people over the past few months. After increased hiring during much of the pandemic, companies from Morgan Stanley to Goldman Sachs are now letting employees go. Even for those who have managed to keep their jobs, they may not receive any bonus at all this year, a tactic banks use for alerting workers about their underperformance.
While an average bonus of $176,000 is still more than many people make in a year, the lower amount will have effects beyond just bankers raking in less cash. The comptroller’s office estimated New York would bring in $457 million less in income tax revenue when compared with 2021 because of the bonus cuts.However, the comptroller’s office said the city and state had expected these losses, and they have updated their budgets accordingly.
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